Advances in information technology have revolutionized some product supply chains. So-called enterprise resource planning (ERP) systems provide users with the capability to link various elements of product/service supply chains by providing a single data repository of manufacturing, accounting, sales, and customer relationship management. However, these systems are typically only useful for supply chains with defined, predictable, product sourcing arrangements. For example, such systems may be optimized for scenarios in which a buyer contracts to buy a defined number of products, and the buyer receives a discount based on the volume of their order.
In some industries, buyers are unable to plan their supply needs in advance with any particular level of certainty. For example, healthcare organizations (HCOs) typically run through particular medical supplies as they receive patients that require those supplies. It can be difficult, if not impossible, to predict the volume of such supplies that will be needed, as that would also require accurate prediction of which patients will get sick, in what way, and when. Additionally, some functionally equivalent products may have equivalents supplied by multiple suppliers. For example, latex surgical gloves may be marketed by several different suppliers under different brand names, even though the product is interchangeable across suppliers. One way that HCOs and other buyers with highly variable product needs have addressed the unpredictability of sales volume and the interchangeability of the products is to receive market-share based pricing from suppliers. For example, while the buyer may not be able to guarantee a particular volume, they may be able to guarantee that they will purchase 80% of products within a particular group of products from a particular supplier. In exchange, the supplier may offer the buyer a particular discount as long as the buyer meets their commitment to buy 80% of the products within the particular group of products from that particular supplier. For the purposes of this application, the term “products” is intended to have broad meaning, including but not limited to tangible and intangible goods both within and outside of the healthcare domain. Examples of these products may include medical supplies and devices, physician preference items, pharmaceuticals, capital, services, and the like.
Suppliers may frequently offer increased values to buyers that can meet particular spending or unit volume commitments, as lost revenue due to reduced margins may be made up for by gained revenue due to increased sales volume. However, these discounts may be unavailable to smaller buyers that do not have enough volume to make these agreements worthwhile for suppliers. In order to attempt to gain the benefits of such volume pricing deals, some buyers have entered into legal relationships with one another to pool spending. These formal associations allow member organizations to combine their spending in the expectation that greater spending will result in lower contract prices for certain purchases. However, there are difficulties associated with these entities including, but not limited to, the fact that these groups require each member to form some type of legal partnership and adhere to a common set of contractual provisions. These groups are static, such group members are bound to the decisions of the group for the duration of the agreement even if the priorities of the individual buyer no longer align with the remainder of the group. Decision-making by such groups is typically a cumbersome and time-consuming process which tends to be driven by group members with the largest spending volume, often leaving smaller volume members with limited ability to influence group decisions. In some aggregation groups, members that are completely compliant with all group decisions and contract commitments are penalized due to the non-compliant activities of other group members. Governance of these groups may be time consuming in and many cases involve numerous activities that are secondary to the goal of optimizing purchasing.
Therefore, a need exists for a market platform that provides buyers with the ability to enter virtual aggregation groups to provide buyers with a flexible, robust platform for obtaining optimal volume discounts while avoiding many of the difficulties associated with known formal associations.